Earlier today, on 18 July 2025, the UK Financial Conduct Authority (the FCA) published a press release and a consultation paper, ‘Deferred Payment Credit (unregulated Buy Now Pay Later): Proposed approach to regulation’ (CP25/23), setting out its proposed rules and guidance for regulation of unregulated Buy Now Pay Later (which will now be called ‘Deferred Payment Credit’ or DPC).
The FCA is inviting responses by 26 September 2025.
The key proposals are:
– information requirements: the FCA proposes to introduce new rules requiring customers to be given information to help them make “effective, timely and informed decisions about DPC borrowing before they enter into an agreement, and throughout the lifetime of the agreement” (including if they miss payments) (see paragraphs 3.9 to 3.75 of CP25/23).
– creditworthiness assessments: the FCA wants DPC lending to be affordable. The FCA will expect firms to “do proportionate creditworthiness assessments, so that borrowers can keep up repayments without harming their financial wellbeing“. The FCA proposes to “apply our existing principles-based rules and guidance at CONC 5.2A” (see paragraphs 3.76 to 3.102 of CP25/23).
– high-level standards and existing consumer credit rules: the FCA wants the consumer duty to apply (requiring firms to act to deliver good outcomes to retail customers) and it will also apply some existing consumer credit rules to DPC (see, for example, paragraphs 2.35 to 2.42, and chapter 4, of CP25/23).
– dispute resolution: customers under a DPC agreement will be able to complain and refer their complaints to the Financial Ombudsman Service (see chapter 5 of CP25/23).
– data reporting: the FCA will expect “better and more up-to-date information about the DPC sector and customer outcomes” (see paragraphs 4.18 to 4.40 of CP25/23).
– authorisation: the FCA proposes to introduce a temporary permissions regime while firms apply for a relevant authorisation from the FCA (see chapter 6 of CP25/23).
Like anything with consumer credit, the devil is always in the detail. For example, the FCA proposes that the key provisions on pre-contractual information will be set out in CONC 4.2A. There are proposed new rules on continuous payment authorities in CONC 4.6.2AR. There are also proposed new rules in CONC 7.20 dealing with information to customers about missed payments and giving notice before taking certain steps. The aim of these proposed rules is to make disclosures and documentation more meaningful and accessible to customers, whilst reducing unnecessary burdens on firms.